13 Nov 2019
This is how much money you need to save to retire comfortably
Do you know how much money you would need to enjoy a minimum, moderate or comfortable retirement?
Probably not, but help is at hand.
New retirement living standards designed to help people picture the lifestyle they want when they stop work - and understand the cost - have just been published.
The Pensions and Lifetime Savings Association (PLSA) says that a single person will need around £10,200 a year to achieve a minimum living standard, £20,200 for moderate, and £33,000 a year for comfortable.
For couples, the equivalent figures are £15,700, £29,100 and £47,500.
PLSA says the standards cover a range of goods and services that are relevant for the majority of people. Currently most people when they reach retirement do not have mortgage, rent or social care costs. But these, and other costs such as tax on pension income, may need to be added depending on an individual's circumstances.
Minimum living
This standard covers all your needs plus enough for some fun - including social participation and social occasions. For example, you could holiday in the UK, eat out about once a month and do some affordable leisure activities about twice a week.
Moderate living
This lifestyle provides, in addition to the minimum lifestyle, more financial security and more flexibility. For example, you could have a two-week holiday in Europe and eat out a few times a month.
Comfortable living
At this level, retirees could also enjoy some luxuries like regular beauty treatments, theatre trips and three weeks in Europe a year.
Nigel Peaple, director of policy and research at the PLSA, said: "The retirement living standards will support better saver engagement. They distill robust, in-depth research with the public into an easy-to-understand basket of goods that helps people picture the future - and relatable figures that can provide a powerful and practical tool for encouraging engagement with saving.
"A recent PLSA survey showed 76% of people with a workplace pension agree that retirement living standards would help them know if they were on track for the lifestyle they want in retirement.
"The PLSA looks forward to working closely with the pensions industry to ensure widespread adoption of the retirement living standards to transform the way people think about saving for spending in later life.
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